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AURORA LOAN SERVICES INC.,
as Servicer
STRUCTURED ASSET SECURITIES CORPORATION,
as Seller
XXXXXX BROTHERS BANK, FSB,
as Servicing Rights Owner
and
AURORA LOAN SERVICES INC.
as Master Servicer
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PARTICIPATION SERVICING AGREEMENT
Dated as of January 1, 2002
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 3
ARTICLE II. SELLER'S ENGAGEMENT OF
SERVICER TO PERFORM SERVICING RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.........3
Section 2.02 Books and Records. ...........................................3
ARTICLE III. SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service...........................................3
Section 3.02 Collection of Participation Mortgage Loan Payments. ..........3
Section 3.03 Establishment of and Deposits to Custodial Account............3
Section 3.04 Permitted Withdrawals From Custodial Account..................3
Section 3.05 Establishment of and Deposits to Escrow Account...............3
Section 3.06 Permitted Withdrawals From Escrow Account.....................3
Section 3.07 Maintenance of PMI Policy and/or LPMI Policy; Claims..........3
Section 3.08 Fidelity Bond and Errors and Omissions Insurance..............3
Section 3.09 Notification of Adjustments...................................3
Section 3.10 Completion and Recordation of Assignments of Mortgage.........3
Section 3.11 Protection of Accounts........................................3
Section 3.12 Payment of Taxes, Insurance and Other Charges.................3
Section 3.13 Maintenance of Hazard Insurance...............................3
Section 3.14 Maintenance of Mortgage Blanket Insurance.....................3
Section 3.15 Restoration of Mortgaged Property.............................3
Section 3.16 Title, Management and Disposition of REO Property.............3
Section 3.17 Real Estate Owned Reports. ...................................3
Section 3.18 MERS. ........................................................3
ARTICLE IV. PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances. .................................................3
Section 4.02 Statements to Master Servicer. ...............................3
Section 4.03 Monthly Advances by Servicer. ................................3
ARTICLE V. GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation........................................3
Section 5.02 Annual Audit Report...........................................3
Section 5.03 Annual Officer's Certificate..................................3
Section 5.04 Transfers of Mortgaged Property...............................3
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ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer....3
Section 6.02 Remedies for Breach of Representations and Warranties of
the Servicer. ............................................3
Section 6.03 Additional Indemnification by the Servicer; Third Party
Claims. ..................................................3
ARTICLE VII. THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.......................3
Section 7.02 Limitation on Liability of the Servicer and Others............3
Section 7.03 Limitation on Resignation and Assignment by the Servicer......3
Section 7.04 Subservicing Agreements and Successor Subservicer.............3
ARTICLE VIII. TERMINATION
Section 8.01 Termination for Cause.........................................3
Section 8.02 Termination Without Cause.....................................3
ARTICLE IX. MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.....................................3
Section 9.02 Costs.........................................................3
Section 9.03 Notices.......................................................3
Section 9.04 Severability Clause...........................................3
Section 9.05 No Personal Solicitation......................................3
Section 9.06 Counterparts..................................................3
Section 9.07 Place of Delivery and Governing Law...........................3
Section 9.08 Further Agreements............................................3
Section 9.09 Intention of the Parties......................................3
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.....3
Section 9.11 Assignment by Each Seller.....................................3
Section 9.12 Waivers.......................................................3
Section 9.13 Exhibits......................................................3
Section 9.14 General Interpretive Principles...............................3
Section 9.15 Reproduction of Documents.....................................3
EXHIBITS & SCHEDULES
EXHIBIT A Participation Mortgage Loan Schedule
EXHIBIT B Custodial Account Letter Agreement
EXHIBIT C Escrow Account Letter Agreement
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SERVICING AGREEMENT
THIS PARTICIPATION SERVICING AGREEMENT (this "Agreement"), entered into
as of the 1st day of January 2002, by and among STRUCTURED ASSET SECURITIES
CORPORATION, a Delaware corporation ("Seller" or "SASCO"), XXXXXX BROTHERS BANK,
FSB, a federal savings bank (the "Servicing Rights Owner"), AURORA LOAN SERVICES
INC., a Delaware corporation (the "Servicer"), and AURORA LOAN SERVICES INC., as
Master Servicer under the related Participation Agreements (as defined herein)
recites and provides as follows:
RECITALS
WHEREAS, from time to time the Servicing Rights Owner will convey
Participation Mortgage Loans on a servicing-retained basis to the Seller, and
the Seller may, at its option, enter into certain Participation Agreements
pursuant to which the Seller will convey certain undivided participation
interests in the Participation Mortgage Loans to the Participants identified in
such Participation Agreements;
WHEREAS, each of the Servicing Rights Owner, the Seller and the
Servicer desires that the Servicer perform certain servicing functions on behalf
of the Seller and the applicable Participants with respect to the Participation
Mortgage Loans pursuant to this Agreement, and the Servicer has agreed to do so,
subject to the right of the Servicing Rights Owner and of the Master Servicer to
terminate the rights and obligations of the Servicer hereunder at any time and
to the other conditions set forth herein;
WHEREAS, the Master Servicer shall be obligated under the related
Participation Agreements, among other things, to supervise the servicing of the
Participation Mortgage Loans on behalf of the Participants, and shall have the
right, under certain circumstances, to terminate the rights and obligations of
the Servicer under this Agreement; and
WHEREAS, the Seller has entered into the Custodial Agreement between
LaSalle Bank, N.A. (the "Custodian") and the Seller dated as of October 1, 2000,
pursuant to which the Custodian will hold the Participation Mortgage Loan
documents related to each Participation Mortgage Loan on behalf of the Seller
and the applicable Participants.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Seller, the Servicer, the Master
Servicer and the Servicing Rights Owner hereby agree as follows:
ARTICLE I.
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed
in writing by the parties):
Accepted Servicing Practices: With respect to any Participation
Mortgage Loan, those mortgage servicing practices of prudent mortgage lending
institutions that service mortgage loans of the same type as such Participation
Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located.
Adjustable Rate Mortgage Loan: A Participation Mortgage Loan serviced
pursuant to this Agreement under which the Mortgage Interest Rate is adjusted
from time to time in accordance with the terms and provisions of the Mortgage
Note.
Aggregate Loan Balance: At any date of determination, the outstanding
principal balance of the Participation Mortgage Loans serviced hereunder.
Agreement: This Participation Servicing Agreement and all amendments
hereof and supplements hereto.
Ancillary Income: All income derived from the Participation Mortgage
Loans, other than Servicing Fees, including but not limited to late charges,
fees received with respect to checks or bank drafts returned by the related bank
for non-sufficient funds, [[Prepayment Penalty Amounts,]] assumption fees,
optional insurance administrative fees and all other incidental fees and
charges.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Participation Mortgage Loans secured by
Mortgaged Properties located in the same jurisdiction, if permitted by law.
Best Efforts: Efforts determined to be reasonably diligent by the
Seller or the Servicer, as the case may be, in its sole discretion. Such efforts
do not require the Seller or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Seller or the Servicer, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Agreement.
Business Day: Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in Colorado, Minnesota, and
New York, New York, are authorized or obligated by law or executive order to be
closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
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Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Participation Mortgage Loan documents.
Costs: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 3.03.
Custodial Agreement: The participation custodial agreement relating to
custody of the Participation Mortgage Loans, between the Custodian and the
Seller, dated as of October 1, 2000.
Custodian: LaSalle Bank, N.A., and its respective successors.
Cut-off Date: With respect to each Participation Mortgage Loan, the
meaning specified in the related Participation Agreement.
Determination Date: With respect to each Remittance Date, the 17th day
of the month in which such Remittance Date occurs, or, if such 17th day is not a
Business Day, the next succeeding Business Day.
Due Date: The day of the month on which the Monthly Payment is due on a
Participation Mortgage Loan, exclusive of any days of grace. With respect to the
Participation Mortgage Loans for which payment from the Mortgagor is due on a
day other than the first day of the month, such Participation Mortgage Loans
will be treated as if the Monthly Payment is due on the first day of the
immediately succeeding month.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month immediately preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of America or
any agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the commercial paper or
other short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;
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(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by Xxxxxx Xxx, Xxxxxx Xxx or Xxxxxxx Mac
with any registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation
rated by each Rating Agency in its highest short-term rating category;
(iv) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof) rated
by each Rating Agency in its highest short-term rating category;
(v) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America) held by a
custodian in safekeeping on behalf of the holders of such receipts; and
provided, however, that no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument, or
(ii) both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the Xxxxxx Mae Guides.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.05.
Escrow Payments: With respect to any Participation Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any event set forth in Section 8.01.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
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Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the Xxxxxx Xxx Guides.
Fitch: Fitch, Inc., or any successor in interest.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Xxxxxx Mae: The Government National Mortgage Association, or any
successor thereto.
Insurance Proceeds: With respect to each Participation Mortgage Loan,
proceeds of insurance policies insuring the Participation Mortgage Loan or the
related Mortgaged Property including proceeds of any hazard or flood insurance
policy, PMI Policy or LPMI Policy.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Participation Mortgage Loan, whether through the sale or
assignment of such Participation Mortgage Loan, trustee's sale, foreclosure sale
or otherwise, or the sale of the related REO Property, if the Mortgaged Property
is acquired in satisfaction of the Participation Mortgage Loan.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Participation Mortgage Loan Schedule
(which shall be payable solely from the interest portion of Monthly Payments,
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds), which,
during such period prior to the required cancellation of the LPMI Policy, shall
be used to pay the premium due on the related LPMI Policy.
LPMI Insurer: None.
LPMI Loan: A Participation Mortgage Loan covered by an LPMI Policy, as
set forth in the Participation Mortgage Loan Schedule or otherwise identified to
the Servicer in writing.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
a LPMI Insurer pursuant to which the related premium is to be paid from payments
of interest made by the Mortgagor.
Master Servicer: Aurora Loan Services Inc., or any successor in
interest, or any successor master servicer under the related Participation
Agreement.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Participation Mortgage Loan that has
been designated by the Servicer as recordable in the name of MERS.
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MERS Mortgage Loan: Any Participation Mortgage Loan as to which the
related Mortgage, or an Assignment of Mortgage, has been or will be recorded in
the name of MERS, as agent for the holder from time to time of the Mortgage
Note.
Monthly Advance: With respect to each Remittance Date and each
Participation Mortgage Loan, an amount equal to the Monthly Payment (with the
interest portion of such Monthly Payment adjusted to the Participation Mortgage
Loan Remittance Rate) that was due on the Participation Mortgage Loan on the Due
Date in the related Due Period, and that (i) was delinquent at the close of
business on the related Determination Date and (ii) was not the subject of a
previous Monthly Advance, but only to the extent that such amount is expected,
in the reasonable judgment of the Servicer, to be recoverable from collections
or other recoveries in respect of such Participation Mortgage Loan. To the
extent that the Servicer determines that any such amount is not recoverable from
collections or other recoveries in respect of such Participation Mortgage Loan,
such determination shall be evidenced by a certificate of a Servicing Officer
delivered to the Master Servicer setting forth such determination and the
procedures and considerations of the Servicer forming the basis of such
determination.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Participation Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., or any successor in interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in the Xxxxxx Mae Guides.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note, after giving effect to any applicable Relief Act Reduction.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-MERS Eligible Mortgage Loan: Any Participation Mortgage Loan other
than a MERS Eligible Mortgage Loan.
Non-MERS Mortgage Loan: Any Participation Mortgage Loan other than a
MERS Mortgage Loan.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Servicer, reasonably acceptable to the Seller, but which must be
independent outside counsel with respect to any such opinion of counsel
concerning (i) the non-recordation of Participation Mortgage Loans pursuant to
Section 2.02 hereof and (ii) federal income tax matters.
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Participant: With respect to each Participation Agreement, any
participant identified on the Annex or Annexes attached thereto, and the Seller,
so long as the Seller retains a percentage interest in the Seller's Rights and
has not conveyed 100% participation interests in the related Participation
Mortgage Loan.
Participation Agreement: Each participation agreement entered into from
time to time by the Seller, the Servicer, the Master Servicer and the
Participants named therein with respect to a Participation Mortgage Loan. The
Participation Agreements are identified on the Participation Mortgage Loan
Schedule attached hereto, as it may be modified by the Seller from time to time,
as the Seller enters into additional Participation Agreements or as
Participation Agreements are terminated.
Participation Mortgage Loan: An individual Participation Mortgage Loan
that is the subject of this Agreement, each Participation Mortgage Loan subject
to this Agreement being identified on the Participation Mortgage Loan Schedule,
as such schedule shall be amended by the Seller from time to time, which
Participation Mortgage Loan includes without limitation the Participation
Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, and all other rights, benefits, proceeds and obligations arising from
or in connection with such Participation Mortgage Loan.
Participation Mortgage Loan Remittance Rate: With respect to each
Participation Mortgage Loan, the annual rate equal to the Mortgage Interest Rate
reduced by the applicable Servicing Fee Rate, and, if applicable, the premium
rate on any lender provided mortgage insurance.
Participation Mortgage Loan Schedule: A schedule of the Participation
Mortgage Loans setting forth information with respect to such Participation
Mortgage Loans (including information regarding the related Participation
Agreement and any MERS identification number (if available) with respect to each
MERS Mortgage Loan or MERS Eligible Mortgage Loan), attached hereto as Exhibit
A, as amended from time to time in accordance with the terms of this Agreement.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Participation Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any Participation
Mortgage Loan that was subject to a Principal Prepayment in full or in part
during any Due Period, which Principal Prepayment was applied to such
Participation Mortgage Loan prior to such Participation Mortgage Loan's Due Date
in such Due Period, the amount of interest (net the related Servicing Fee for
Principal Prepayments in full only) that would have accrued on the amount of
such Principal Prepayment during the period commencing on the date as of which
such Principal Prepayment was applied to such Participation Mortgage Loan and
ending on the day immediately preceding such Due Date, inclusive.
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Prepayment Penalty Amount: With respect to any Remittance Date, all
premiums or charges paid by the obligors under the Mortgage Notes due to
Principal Prepayments collected by the Servicer during the immediately preceding
Prepayment Period.
Prepayment Period: With respect to any Remittance Date and any full or
partial Principal Prepayment, the calendar month immediately preceding the month
of such Remittance Date.
Prime Rate: The prime rate published from time to time, as published as
the average rate in The Wall Street Journal Northeast Edition.
Principal Prepayment: Any payment or other recovery of principal on a
Participation Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Qualified Depository: Any of (i) a federal or state-chartered
depository institution the accounts of which are insured by the FDIC and whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least "A-1+" by Standard & Poor's if the deposits are to be held in the
account for less than 30 days, or whose long-term unsecured debt obligations are
rated at least "AA-" by Standard & Poor's if the deposits are to be held in the
account for more than 30 days, or (ii) the corporate trust department of a
federal or state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), which, in either case, has corporate trust powers,
acting in its fiduciary capacity, or (iii) the Bank.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating Agency: Each of Fitch, Xxxxx'x and S&P.
Relief Act Reduction: With respect to any Participation Mortgage Loan
as to which there has been a reduction in the amount of the interest collectible
thereon as a result of the application of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended, any amount by which interest collectible on such
Participation Mortgage Loan for the Due Date in the related Due Period is less
than the interest accrued thereon for the applicable one month period at the
Mortgage Interest Rate without giving effect to such reduction.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month.
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REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Seller and the applicable Participants through foreclosure or by deed in
lieu of foreclosure, pursuant to Section 3.12.
Servicer: Aurora Loan Services Inc. or its successor in interest or
assigns or any successor Servicer under this Agreement as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
inspection, restoration and protection of the Mortgaged Property, (ii) any
enforcement or administrative or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (iv) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property and fire and hazard insurance coverage, (v) any losses
sustained by the Servicer with respect to the liquidation of the Mortgaged
Property and (vi) compliance with the obligations pursuant to the provisions of
the Xxxxxx Mae Guides.
Servicing Fee: An amount equal to one-twelfth the product of (i) a rate
per annum equal to the rate set forth on the Participation Mortgage Loan
Schedule and (ii) the outstanding principal balance of such Participation
Mortgage Loan. The obligation of the Seller and the Participants to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds to the extent permitted by Section 3.02 of this Agreement) of such
Monthly Payment collected by the Servicer or as otherwise provided under this
Agreement.
Servicing File: The items pertaining to a particular Participation
Mortgage Loan including, but not limited to, the computer files, data disks,
books, records, data tapes, notes, and all additional documents generated as a
result of or utilized in originating and/or servicing each Participation
Mortgage Loan, which are held in trust for the Seller and the applicable
Participants by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Participation Mortgage
Loans whose name appears on a list of servicing officers furnished by the
Servicer to the Master Servicer, the Participants or Seller (with respect to its
related Participation Mortgage Loans) upon request, as such list may from time
to time be amended.
Servicing Transfer: Any transfer of the servicing by a Prior Servicer
of Participation Mortgage Loans to the Servicer under this Agreement.
Servicing Transfer Date: The date on which a Servicing Transfer occurs.
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S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc, or any successor in interest.
Transfer Date: Each date on which additional Participation Mortgage
Loans are included in the Participation Mortgage Loan Schedule attached hereto
and become subject to this Agreement and the Custodial Agreement.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the applicable Participation Agreement.
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.
The Seller, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Participation Mortgage Loans. On or before each Transfer Date,
as applicable, the Seller shall cause to be delivered the Servicing Files with
respect to the related Participation Mortgage Loans listed on the Participation
Mortgage Loan Schedule to the Servicer. Each Servicing File delivered to the
Servicer shall be held in trust by the Servicer for the benefit of the Seller
and the applicable Participants; provided, however, that the Servicer shall have
no liability for any Servicing Files (or portions thereof) not delivered by the
Seller. The Servicer's possession of any portion of the Participation Mortgage
Loan documents shall be at the will of the Seller and the applicable
Participants for the sole purpose of facilitating servicing of the related
Participation Mortgage Loan pursuant to this Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The ownership
of each Mortgage Note, Mortgage, and the contents of the Servicing File shall be
vested in the Seller and the applicable Participants and the ownership of all
records and documents with respect to the related Participation Mortgage Loan
prepared by or which come into the possession of the Servicer shall immediately
vest in the Seller and the applicable Participants and shall be retained and
maintained, in trust, by the Servicer at the will of the Seller and the
applicable Participants in such custodial capacity only. The portion of each
Servicing File retained by the Servicer pursuant to this Agreement shall be
segregated from the other books and records of the Servicer and shall be
appropriately marked to clearly reflect the ownership of the related
Participation Mortgage Loan by the Seller and the applicable Participants. The
Servicer shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement.
Section 2.02 Books and Records.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after the
related Transfer Date (but in no event more than 90 days thereafter except to
the extent delays are caused by the applicable recording office), the Servicer,
at the expense of the Seller, shall cause the Mortgage or Assignment of
Mortgage, as applicable, with respect to each MERS Eligible Mortgage Loan, to be
properly recorded in the name of MERS in the public recording office in the
applicable jurisdiction, or shall ascertain that such have previously been so
recorded and, with the cooperation of the Seller, shall take such actions as are
necessary to cause the applicable Participants to be clearly identified as the
owner of each MERS Mortgage Loan and each MERS Eligible Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
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(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in
favor of the Seller shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Seller. Subject to the preceding sentence, as soon as practicable after the
related Transfer Date, as applicable (but in no event more than 90 days
thereafter except to the extent delays are caused by the applicable recording
office), the Servicer, at the expense of the Seller, shall cause to be properly
recorded in each public recording office where such Non-MERS Eligible Mortgage
Loans are recorded each Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, at the
direction of the Seller, any note endorsements relating to any of the Non-MERS
Mortgage Loans.
(d) All rights arising out of the Participation Mortgage Loans shall be
vested in the Seller and the applicable Participants, subject to the Servicer's
right to service and administer the Participation Mortgage Loans hereunder in
accordance with the terms of this Agreement. All funds received on or in
connection with a Participation Mortgage Loan, other than the Servicing Fee and
other compensation to which the Servicer is entitled as set forth herein,
including but not limited to in Section 5.01 below, shall be received and held
by the Servicer in trust for the benefit of the Seller and the applicable
Participants pursuant to the terms of this Agreement.
ARTICLE III.
SERVICING OF THE PARTICIPATION MORTGAGE LOANS
Section 3.01 Servicer to Service.
The Servicer, as an independent contractor, shall service and
administer the Participation Mortgage Loans from and after the related Transfer
Date and shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices.
The Seller and the Servicer additionally agree as follows:
(a) The Servicer shall (i) record or cause to be recorded the Mortgage
or the Assignment of Mortgage, as applicable, with respect to all MERS Eligible
Mortgage Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (ii) with the cooperation of the Seller and the
applicable Participants, take such actions as are necessary to cause the
applicable Participants to be clearly identified as the owner of each MERS
Mortgage Loan and each MERS Eligible Mortgage Loan on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS; (iii) prepare or cause to be prepared all
Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage Loans;
(iv) record or cause to be recorded, subject to Section 2.02(b) hereof, all
Assignments of Mortgage with respect to Non-MERS Mortgage Loans in the name of
the Seller; (v) pay the recording costs pursuant to Section 2.02 hereof; and/or
(vi) track such Mortgages and Assignments of Mortgage to ensure they have been
recorded. The Servicer shall be entitled to be paid by the Seller the fees set
forth on Schedule 1 hereto for the preparation and recordation of the Mortgages
and Assignments of Mortgage. After the expenses of such recording costs pursuant
to Section 2.02 hereof shall have been paid by the Servicer, the Servicer shall
submit to the Seller a reasonably detailed invoice for reimbursement of
recording costs and fees it incurred hereunder.
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(b) If applicable, the Servicer shall, in accordance with the relevant
provisions of the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990, as
the same may be amended from time to time, and the regulations provided in
accordance with the Real Estate Settlement Procedures Act, provide notice to the
Mortgagor of each Participation Mortgage Loan of the transfer of the servicing
thereto to the Servicer.
(c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.
Consistent with the terms of this Agreement, the Servicer may waive any
late payment charge, assumption fee or other fee that may be collected in the
ordinary course of servicing the Participation Mortgage Loans. The Servicer
shall not make any future advances to any obligor under any Participation
Mortgage Loan, and (unless the Mortgagor is in default with respect to the
Participation Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) the Servicer shall not permit any modification of any
material term of any Participation Mortgage Loan, including any modification
that would change the Mortgage Interest Rate, defer or forgive the payment of
principal or interest, reduce or increase the outstanding principal balance
(except for actual payments of principal) or change the final maturity date on
such Participation Mortgage Loan. In the event of any such modification which
permits the deferral of interest or principal payments on any Participation
Mortgage Loan, the Servicer shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment has
been deferred, make a Monthly Advance in accordance with Section 4.03, in an
amount equal to the difference between (i) such month's principal and one
month's interest at the Participation Mortgage Loan Remittance Rate on the
unpaid principal balance of such Participation Mortgage Loan and (ii) the amount
paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such
advances to the same extent as for all other advances made pursuant to Section
4.03. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself, the Seller and the applicable Participants, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Participation Mortgage Loans
and with respect to the Mortgaged Properties. Upon the request of the Servicer,
the Seller shall execute and deliver to the Servicer any powers of attorney and
other documents, furnished to it by the Servicer and reasonably satisfactory to
the Seller, necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the
Servicer shall not (unless the Servicer determines, in its own discretion, that
there exists a situation of extreme hardship to the Mortgagor), waive any
premium or penalty in connection with a prepayment of principal of any
Participation Mortgage Loan, and shall not consent to the modification of any
Mortgage Note to the extent that such modification relates to payment of a
prepayment premium or penalty.
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In servicing and administering the Participation Mortgage Loans, the
Servicer shall employ procedures (including collection procedures) and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account, giving due consideration to
Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, the Xxxxxx Xxx Guides, and the Master Servicer's
and Seller's reliance on the Servicer.
Section 3.02 Collection of Participation Mortgage Loan Payments.
Continuously from the related Transfer Date until the date each
Participation Mortgage Loan ceases to be subject to this Agreement, the Servicer
shall proceed diligently to collect all payments due under each of the
Participation Mortgage Loans when the same shall become due and payable and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Participation
Mortgage Loans and each related Mortgaged Property, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.
Section 3.03 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Participation Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Custodial Accounts, in the form of time deposit or demand accounts, titled as
"Aurora Loan Services Inc., in trust for Structured Asset Securities Corporation
and the various Participants" or as otherwise directed by the Master Servicer.
The Custodial Account shall be established with a Qualified Depository. Any
funds deposited in the Custodial Account may be invested in Eligible Investments
subject to the provisions of Section 3.11 hereof. Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
3.04. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form of Exhibit B. A copy of such certification or letter
agreement shall be furnished to the Master Servicer and, upon request, to any
subsequent owner of the Participation Mortgage Loan.
The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein, the following collections received by the Servicer and
payments made by the Servicer after the related Transfer Date, as applicable:
(i) all payments on account of principal on the Participation Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Participation Mortgage
Loans adjusted to the Participation Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
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(iv) all Insurance Proceeds (other than amounts applied to the
restoration or repair of the Mortgaged Property or immediately released to the
Mortgagor in accordance with Accepted Servicing Practices);
(v) all Condemnation Proceeds that are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor;
(vi) with respect to each Principal Prepayment in full or in part, the
Prepayment Interest Shortfall Amount, if any, for the month of distribution,
made from the Servicer's own funds, without reimbursement therefor up to a
maximum amount per month equal to the aggregate of the Servicing Fees received
for the Participation Mortgage Loans in such month;
(vii) all Monthly Advances made by the Servicer pursuant to Section
4.03;
(viii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds; and
(x) any other amount required hereunder to be deposited by the Servicer
in the Custodial Account.
The foregoing requirements for deposit into the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of the Servicing Fee and
Ancillary Income need not be deposited by the Servicer into the Custodial
Account.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement and
accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.
Section 3.04 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Master Servicer in the amounts and in the
manner provided for in Section 4.01;
(ii) with respect to each LPMI Loan, in the amount of the related LPMI
Fee, to make payments with respect to premiums for LPMI Policies in accordance
with Section 3.07;
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(iii) in the event the Servicer has elected not to retain the Servicing
Fee out of any Mortgagor payments on account of interest or other recovery of
interest with respect to a particular Participation Mortgage Loan (including
late collections of interest on such Participation Mortgage Loan, or interest
portions of Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds)
prior to the deposit of such Mortgagor payment or recovery in the Custodial
Account, to pay to itself the related Servicing Fee from all such Mortgagor
payments on account of interest or other such recovery for interest with respect
to that Participation Mortgage Loan;
(iv) to pay itself investment earnings on funds deposited in the
Custodial Account;
(v) to clear and terminate the Custodial Account upon the termination
of this Agreement;
(vi) to transfer funds to another Qualified Depository in accordance
with Section 3.11 hereof;
(vii) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;
(viii) to reimburse itself to the extent of funds in the Custodial
Account for Monthly Advances of the Servicer's funds made pursuant to Section
4.03, the Servicer's right to reimburse itself pursuant to this subclause (viii)
with respect to any Participation Mortgage Loan being limited to amounts
received on or in respect of the related Participation Mortgage Loan which
represent late recoveries of payments of principal or interest with respect to
which a Monthly Advance was made, it being understood that, in the case of any
such reimbursement, the Servicer's right thereto shall be prior to the rights of
the Trust Fund, provided, however, that following the final liquidation of a
Participation Mortgage Loan, the Servicer may reimburse itself for previously
unreimbursed Monthly Advances in excess of Liquidation Proceeds or Insurance
Proceeds with respect to such Participation Mortgage Loan from any funds in the
Custodial Account, it being understood, in the case of any such reimbursement,
that the Servicer's right thereto shall be prior to the rights of the Trust
Fund. The Servicer may recover at any time from amounts on deposit in the
Custodial Account the amount of any Monthly Advances that the Servicer deems
nonrecoverable or that remain unreimbursed to the Servicer from related
Liquidation Proceeds after the final liquidation of the Participation Mortgage
Loan;
(ix) to reimburse itself for unreimbursed Servicing Advances, and for
any unpaid Servicing Fees, the Servicer's right to reimburse itself pursuant to
this subclause (ix) with respect to any Participation Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other amounts received in respect of the
related REO Property, and such other amounts as may be collected by the Servicer
from the Mortgagor or otherwise relating to the Participation Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Seller and the applicable
Participants.
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(x) to reimburse itself for expenses incurred or reimbursable to the
Servicer pursuant to Sections 3.12 and 6.03 to the extent not previously
reimbursed under clause (ix) of this Section 3.04; and
(xi) to withdraw funds deposited in error.
Section 3.05 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Participation Mortgage Loan constituting Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled as "Aurora Loan Services Inc., in trust for Structured Asset
Securities Corporation and the various Participants" or as otherwise directed by
the Master Servicer. The Escrow Accounts shall be established with a Qualified
Depository in a manner that shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 3.06. The creation of any Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit C. A copy of
such certification or letter agreement shall be furnished to the Master Servicer
and, upon request, to any subsequent owner of the Participation Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Participation
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds that are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall retain any interest paid on funds deposited in
the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 3.06 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, sewer rents, mortgage insurance premiums, condominium charges, fire
and hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
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(ii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Participation Mortgage Loan;
(iii) for transfer to the Custodial Account and application to reduce
the principal balance of the Participation Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(iv) to reimburse the Servicer for any Servicing Advance made by the
Servicer with respect to a related Participation Mortgage Loan, but only from
amounts received on the related Participation Mortgage Loan which represent late
collections of Escrow Payments.
(v) for application to restoration or repair of the Mortgaged Property
in accordance with the Xxxxxx Mae Guides;
(vi) to pay to the Servicer, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account
(vii) to remove funds inadvertently placed in the Escrow Account by the
Servicer; and
(viii) to clear and terminate the Escrow Account on the termination of
this Agreement.
Section 3.07 Maintenance of PMI Policy and/or LPMI Policy; Claims.
The Servicer shall comply with all provisions of applicable state and
federal law relating to the cancellation of, or collection of premiums with
respect to, PMI Policies, including, but not limited to, the provisions of the
Homeowners Protection Act of 1998, and all regulations promulgated thereunder,
as amended from time to time.
With respect to each Participation Mortgage Loan (other than LPMI
Loans) with a loan to value ratio at origination in excess of 80%, the Servicer
shall maintain or cause the Mortgagor to maintain (to the extent that the
Participation Mortgage Loan requires the Mortgagor to maintain such insurance)
in full force and effect a PMI Policy, and shall pay or shall cause the
Mortgagor to pay the premium thereon on a timely basis, until the LTV of such
Participation Mortgage Loan is reduced to 80%. In the event that such PMI Policy
shall be terminated, the Servicer shall obtain from another Qualified Insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy, at substantially the same fee level. The
Servicer shall not take any action which would result in noncoverage under any
applicable PMI Policy of any loss which, but for the actions of the Servicer
would have been covered thereunder. In connection with any assumption or
substitution agreements entered into or to be entered into with respect to a
Participation Mortgage Loan, the Servicer shall promptly notify the insurer
under the related PMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such PMI Policy and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy. If such PMI Policy is terminated as a result
of such assumption or substitution of liability, the Servicer shall obtain a
replacement PMI Policy as provided above.
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The Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, the Servicer shall have full authority on behalf of
the Trust to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. The Servicer shall not modify or assume a Participation Mortgage Loan
covered by the LPMI Policy or take any other action with respect to such
Participation Mortgage Loan which would result in non-coverage under the LPMI
Policy of any loss which, but for the actions of the Servicer, would have been
covered thereunder. If the LPMI Insurer fails to pay a claim under the LPMI
Policy as a result of breach by the Servicer of its obligations hereunder or
under the LPMI Policy, the Servicer shall be required to deposit in the
Custodial Account on or prior to the next succeeding Remittance Date an amount
equal to such unpaid claim from its own funds without any right to reimbursement
from the Trust Fund. The Servicer shall cooperate with the LPMI Insurer and the
Master Servicer and shall use its best efforts to furnish all reasonable aid,
evidence and information in the possession of the Servicer to which the Servicer
has access with respect to any LPMI Loan; provided, however, notwithstanding
anything to the contrary contained in any LPMI Policy, the Servicer shall not be
required to submit any reports to the LPMI Insurer until a reporting date that
is at least 15 days after the Servicer has received sufficient loan level
information from each Seller, the Master Servicer or the LPMI Insurer to
appropriately code its servicing system in accordance with the LPMI Insurer's
requirements.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the applicable Participants, claims
to the insurer under any PMI Policy or LPMI Policy in a timely fashion in
accordance with the terms of such PMI Policy or LPMI Policy and, in this regard,
to take such action as shall be necessary to permit recovery under any PMI
Policy or LPMI Policy respecting a defaulted Participation Mortgage Loan. Any
amounts collected by the Servicer under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.04.
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance Policy. Such Fidelity Bond and
Errors and Omissions Insurance shall be maintained with recognized insurers and
shall be in such form and amount as would permit the Servicer to be qualified as
a Xxxxxx Xxx or Xxxxxxx Mac seller-servicer. The Servicer shall be deemed to
have complied with this provision if an affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. The Servicer shall furnish to the Master Servicer a copy of each
such bond and insurance policy if (i) the Master Servicer so requests and (ii)
the Servicer is not an affiliate of Xxxxxx Brothers Inc. at the time of such
request.
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Section 3.09 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Master Servicer such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Master Servicer that the Servicer has failed to adjust a
Mortgage Interest Rate or Monthly Payment in accordance with the terms of the
related Mortgage Note, the Servicer shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
thereby.
Section 3.10 Completion and Recordation of Assignments of Mortgage.
As soon as practicable after the related Transfer Date (but in no event
more than 90 days thereafter except to the extent delays are caused by the
applicable public recording office), the Servicer shall cause the endorsements
on the Mortgage Note (if applicable), and the Assignments of Mortgage (subject
to Section 3.01(a)) to be completed in the name of the Seller for the benefit of
the applicable Participants (or MERS, as applicable).
Section 3.11 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. Such transfer shall be
made only upon obtaining the consent of the Master Servicer, which consent shall
not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by
the Master Servicer or the Seller or applicable Participants if the Custodial
Account and/or the Escrow Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Servicer be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Servicer shall be obligated to invest the excess amount over the Insured Amount
in Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Business Day immediately preceding the
related Remittance Date, provided, however, that if such Eligible Investment is
an obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account or the Escrow Account, then such Eligible Investment may
mature on the related Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer in trust for the benefit of the Seller and
applicable Participants. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at any
time by the Servicer. Any losses incurred in respect of any such investment
shall be deposited in the Custodial Account or the Escrow Account, by the
Servicer out of its own funds immediately as realized.
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Section 3.12 Payment of Taxes, Insurance and Other Charges.
With respect to each Participation Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates, sewer rents, and other charges which are or may become
a lien upon the Mortgaged Property and the status of PMI Policy and LPMI Policy
(if any) premiums and fire and hazard insurance coverage and shall obtain, from
time to time, all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the applicable penalty or
termination date, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Servicer shall not be required to maintain records with respect to
the payment of LPMI Premiums unless the Servicer shall be required to make
payment of such premiums and such requirement shall be indicated on the
Participation Mortgage Loan Schedule with respect to each applicable
Participation Mortgage Loan. The Servicer assumes full responsibility for the
timely payment of all such bills, shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments, and shall make advances from its own
funds to effect such payments. With regard to any Participation Mortgage Loans
for which the Mortgagor is not required to escrow Escrow Payments with the
Servicer, the Servicer shall use reasonable efforts consistent with Accepted
Servicing Practices to determine that any such payments are made by the
Mortgagor at the time they first became due and shall insure that the Mortgaged
Property is not lost to a tax lien as a result of nonpayment and that such
Mortgage is not left uninsured and shall make advances from its own funds to
effect any such delinquent payments to avoid the lapse of insurance coverage on
the Mortgaged Property or to avoid the imposition of a tax lien.
Section 3.13 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Participation
Mortgage Loan hazard insurance such that all buildings upon the Mortgaged
Property are insured by a generally acceptable insurer against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, in an amount which is at least equal to
the greater of (i) the outstanding principal balance of the Participation
Mortgage Loan and (ii) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer.
If upon origination of the Participation Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Participation Mortgage Loan, the Servicer determines in accordance with
applicable law and pursuant to the Xxxxxx Xxx Guides that a Mortgaged Property
is located in a special flood hazard area and is not covered by flood insurance
or is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Servicer shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within
forty-five (45) days after such notification, the Servicer shall force place the
required flood insurance on the Mortgagor's behalf.
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Section 3.14 Maintenance of Mortgage Blanket Insurance.
The Servicer shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage on
all of the Participation Mortgage Loans. To the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 3.12 and
otherwise complies with all other requirements of Section 3.12, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
3.12. Any amounts collected by the Servicer under any such policy relating to a
Participation Mortgage Loan shall be deposited in the Custodial Account or
Escrow Account subject to withdrawal pursuant to Sections 3.04 or 3.06. Such
policy may contain a deductible clause, in which case, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with Section 3.12, and there shall have been a loss which would have
been covered by such policy, the Servicer shall deposit in the Custodial Account
at the time of such loss the amount not otherwise payable under the blanket
policy because of such deductible clause, such amount to be deposited from the
Servicer's funds, without reimbursement therefor.
Section 3.15 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Seller and the
applicable Participants or the Master Servicer prior to releasing any Insurance
Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance
with Accepted Servicing Practices. At a minimum, with respect to claims greater
than $10,000, the Servicer shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
Section 3.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Seller (or MERS, as applicable), or in the
event the Seller is not authorized or permitted to hold title to real property
in the state where the REO Property is located, or would be adversely affected
under the "doing business" or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an Opinion of Counsel obtained by the Servicer from
any attorney duly licensed to practice law in the state where the REO Property
is located. The Person or Persons holding such title other than the Seller shall
acknowledge in writing that such title is being held as nominee for the Seller
for the benefit of the applicable Participants.
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The Servicer shall manage, conserve, protect and operate each REO
Property for the Seller and the applicable Participants solely for the purpose
of its prompt disposition and sale. The Servicer, either itself or through an
agent selected by the Servicer, shall manage, conserve, protect and operate the
REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed. The
Servicer shall attempt to sell the same (and may temporarily rent the same for a
period not greater than one year, except as otherwise provided below) on such
terms and conditions as the Servicer deems to be in the best interest of the
Seller and the applicable Participants. If the Servicer determines that it is in
the best interest of the Seller and the applicable Participants to not proceed
with foreclosure or accept a deed in lieu of foreclosure, the Servicer shall
have the right to do so, whereupon the related Participation Mortgage Loan shall
be deemed to be finally liquidated and the Servicer shall have the right to
release the lien of the Mortgage on the related Mortgage Property and the
Servicer shall be entitled to reimbursement for all outstanding unreimbursed
Servicing Advances and Monthly Advances from the Custodial Account in accordance
with Section 3.04(viii).
The Servicer may permit an obligor to pay off a non-performing
Participation Mortgage Loan at less than its unpaid principal balance if such
discounted payoff is in accordance with Accepted Servicing Practices and the
Servicer believes that such discounted payoff is in the best interest of the
Trust Fund; provided that in the case of any proposed discounted payoff, the
Servicer shall notify the Master Servicer, by telecopy and telephone, of the
proposed discounted payoff. The Master Servicer shall be deemed to have approved
the discounted payoff of any Participation Mortgage Loan unless the Master
Servicer notifies the Servicer in writing, within five (5) Business Days after
its receipt of the related notice, that it disapproves of the discounted payoff,
in which case the Servicer shall not proceed with such discounted payoff.
Notwithstanding anything to the contrary contained in this Section
3.16, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Master Servicer or the Seller otherwise requests, an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector shall be arranged by the Servicer. Upon completion of the inspection,
the Servicer shall provide the Master Servicer and the Seller with a written
report of such environmental inspection. In the event that the environmental
inspection report indicates that the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, the Servicer shall not proceed with
foreclosure or acceptance of a deed in lieu of foreclosure. In the event that
the environmental inspection report is inconclusive as to the whether or not the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
the Servicer shall not, without the prior approval of the related Majority
Participants, proceed with foreclosure or acceptance of a deed in lieu of
foreclosure. In such instance, the related Majority Participants shall be deemed
to have approved such foreclosure or acceptance of a deed in lieu of foreclosure
unless such Majority Participants notify the Servicer in writing, within two (2)
Business Days after their receipt of written notice of the proposed foreclosure
or deed in lieu of foreclosure from the Servicer, that it disapproves of the
related foreclosure or acceptance of a deed in lieu of foreclosure. The Servicer
shall be reimbursed for all Servicing Advances made pursuant to this paragraph
with respect to the related Mortgaged Property from the Custodial Account.
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The Servicer shall use its Best Efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, unless (a) a REMIC
election has not been made with respect to the arrangement under which the
related Participations are held, and (b) the Servicer determines, and gives an
appropriate notice to the Master Servicer to such effect, that a longer period
is necessary for the orderly liquidation of such REO Property. If a period
longer than three years is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Servicer shall report monthly to the
Master Servicer as to the progress being made in selling such REO Property and
(ii) if, with the written consent of the related Majority Participants, a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Servicer as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer, the Seller and the applicable
Participants shall be entered into with respect to such purchase money mortgage.
Notwithstanding anything herein to the contrary, the Servicer shall not be
required to provide financing for the sale of any REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to the approval of the Master Servicer as described in this
paragraph, the disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Seller and the applicable Participants. Prior to
acceptance by the Servicer of an offer to sell any REO Property, the Servicer
shall notify the Master Servicer and the Seller of such offer in writing which
notification shall set forth all material terms of said offer (each a "Notice of
Sale"). The Master Servicer shall be deemed to have approved the sale of any REO
Property unless the Master Servicer notifies the Servicer in writing, within two
(2) Business Days after its receipt of the related Notice of Sale, that it
disapproves of the related sale, in which case the Servicer shall not proceed
with the sale. With respect to any REO Property, upon a REO Disposition, the
Servicer shall be entitled to retain from REO Disposition Proceeds a disposition
fee equal to $1,250.
The Servicer shall withdraw from the Custodial Account funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to the Xxxxxx
Mae Guides. The Servicer shall make monthly distributions on each Remittance
Date to the Master Servicer of the net cash flow from the REO Property (which
shall equal the revenues from such REO Property net of the expenses described in
this Section 3.12 and of any reserves reasonably required from time to time to
be maintained to satisfy anticipated liabilities for such expenses).
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Section 3.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish to the Master Servicer on or before the Remittance Date
each month a statement with respect to any REO Property covering the operation
of such REO Property for the previous month and the Servicer's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Master Servicer shall
reasonably request.
Section 3.18 MERS.
(a) So long as the Seller is a member of MERS, the Servicer shall use its Best
Efforts to cause the Seller to be identified as the owner of each MERS Mortgage
Loan on the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in MERS. In
addition, the Servicer shall comply with all rules, policies and procedures of
MERS, including the Rules of Membership, as amended, and the MERS Procedures
Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the Servicer
shall promptly notify MERS as to any transfer of beneficial ownership of such
Participation Mortgage Loans of which the Servicer has notice.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the Servicer
shall notify MERS as to any transfer of servicing pursuant to Section 3.15 or
Section 9.01 within 10 Business Days of such transfer of servicing. The Servicer
shall cooperate with the Seller, the Master Servicer and any successor Servicer
to the extent necessary to ensure that such transfer of servicing is
appropriately reflected on the MERS system.
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Master Servicer (i) all amounts deposited in
the Custodial Account as of the close of business on the last day of the related
Due Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 3.04), plus (ii) all Monthly Advances, if any, which the
Servicer is obligated to make pursuant to Section 4.03, minus (iii) any amounts
attributable to Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the applicable
Prepayment Period, which amounts shall be remitted on the following Remittance
Date, together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 3.03(vi), and minus (iv) any amounts attributable to Monthly
Payments collected but due on a Due Date or Due Dates subsequent to the first
day of the month in which such Remittance Date occurs, which amounts shall be
remitted on the Remittance Date next succeeding the Due Date related to such
Monthly Payment.
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With respect to any remittance received by the Master Servicer after
the Business Day on which such payment was due, the Servicer shall pay to the
Master Servicer interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus two (2) percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Servicer
on the date such late payment is made and shall cover the period commencing with
the day following such Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
the distribution payable on the next succeeding Remittance Date. The payment by
the Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
All remittances required to be made to the Master Servicer shall be
made to the following wire account or to such other account as may be specified
by the Master Servicer from time to time:
JPMorgan Chase Bank
New York, New York
ABA#: 000-000-000
Account Name: Aurora Loan Services Inc.
Master Servicing Payment Clearing Account
Account Number: 666-611059
Beneficiary: Aurora Loan Services Inc.
For further credit to: Structured Asset Securities Corporation
and the various Participants
Section 4.02 Statements to Master Servicer.
Not later than the tenth calendar day of each month (or if such
calendar day is not a Business Day, the immediately succeeding Business Day),
the Servicer shall furnish to the Master Servicer (i) a monthly remittance
advice containing such information in the form of Xxxxxx Xxx Form 2010 or such
other form as shall be required by the Xxxxxx Mae Guides or by the Master
Servicer as to the accompanying remittance and the period ending on the last day
of the preceding calendar month and (ii) all such information required pursuant
to clause (ii) above on a magnetic tape or other similar media reasonably
acceptable to the Master Servicer.
In addition, not more than 60 days after the end of each calendar year,
commencing December 31, 2002, the Servicer shall furnish to each Person or
Participant who was an owner of or had an interest in, any of the Participation
Mortgage Loans at any time during such calendar year as required by applicable
law or if not required by applicable law, at the request of such owner or
Participant as to the aggregate of remittances for the applicable portion of
such year.
Such obligation of the Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Internal Revenue Code as from time
to time are in force.
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Beginning with calendar year 2002, the Servicer shall provide the
Master Servicer with such information concerning the Participation Mortgage
Loans as is necessary for the Master Servicer to prepare the Seller's or any
Participant's federal income tax return as the Master Servicer may reasonably
request from time to time.
Section 4.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to the aggregate
of all Monthly Advances relating to Monthly Payments which were due on the
Participation Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the immediately preceding Determination
Date or which were deferred pursuant to Section 3.01. Any amounts held for
future distribution and so used shall be replaced by the Servicer by deposit in
the Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than remittances to the
Master Servicer required to be made on such Remittance Date. The Servicer's
obligation to make such Monthly Advances as to any Participation Mortgage Loan
will continue through the last Monthly Payment due prior to the payment in full
of the Participation Mortgage Loan, or through the last Remittance Date prior to
the Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the Participation Mortgage Loan unless the Servicer deems such
Monthly Advances to be unrecoverable, as evidenced by an Officer's Certificate
of the Servicer delivered to the Master Servicer.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.
As consideration for servicing the Participation Mortgage Loans subject
to this Agreement, the Servicer shall retain (i) the relevant Servicing Fee for
each Participation Mortgage Loan remaining subject to this Agreement during any
month and (ii) Ancillary Income. In addition, if at any time the Servicer is the
Retained Interest Holder with respect to any Participation Mortgage Loans, then
the Servicer, as the Retained Interest Holder, shall retain an amount equal to
the Retained Interest relating to such Participation Mortgage Loans; provided,
that (i) the Master Servicer shall have no obligation to make payment of the
Retained Interest to the Servicer and (ii) the Servicer's right to retain the
Retained Interest is limited to (and the Retained Interest may only be retained
from) the interest portion (including recoveries with respect to interest from
Liquidation Proceeds to the extent permitted by Section 3.02 of this Agreement)
of the Monthly Payments collected by the Servicer with respect to those
Participation Mortgage Loans for which payment is in fact made of the entire
amount of the Monthly Payment. The Servicing Fee shall be payable monthly. The
Servicing Fees shall be payable only at the time of and with respect to those
Participation Mortgage Loans for which payment is in fact made of the entire
amount of the Monthly Payment or as otherwise provided in Section 3.04. The
obligation of the Seller and the Participants to pay the Servicing Fees is
limited as provided in Section 3.04. The Servicing Fees payable to the Servicer
for any month with respect to a Participation Mortgage Loan shall be reduced by
any Prepayment Interest Shortfall Amount with respect to such month.
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The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 5.02 Annual Audit Report.
On or before April 30 of each year, beginning with April 30, 2003,
Servicer shall, at its own expense, cause a firm of independent public
accountants (who may also render other services to Servicer), which is a member
of the American Institute of Certified Public Accountants, to furnish to the
Seller and the Master Servicer (i) year-end audited (if available) financial
statements of the Servicer and (ii) a statement to the effect that such firm has
examined certain documents and records for the preceding fiscal year (or during
the period from the date of commencement of such Servicer's duties hereunder
until the end of such preceding fiscal year in the case of the first such
certificate) and that, on the basis of such examination conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm is of the opinion that Servicer's overall servicing operations have
been conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
Section 5.03 Annual Officer's Certificate.
On or before April 30 of each year, beginning with April 30, 2003, the
Servicer, at its own expense, will deliver to the Seller and the Master Servicer
a Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during such preceding fiscal year and
of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement for
such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the nature
and status thereof including the steps being taken by the Servicer to remedy
such default.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Seller, the Servicing Rights Owner and each Participant as of each
Transfer Date:
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(a) Due Organization and Authority. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Servicer, and in any event the Servicer is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the terms of
this Agreement; the Servicer has the full power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer and all requisite action has been taken by the
Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the servicing responsibilities by the Servicer or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Servicer's organizational
documents or any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject, or impair the ability of the Servicer to service the
Participation Mortgage Loans, or impair the value of the Participation Mortgage
Loans;
(d) Ability to Perform. The Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Servicer which, either in any
one instance or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the Servicer
to carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in connection
with the obligations of the Servicer contemplated herein, or which would be
likely to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement;
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(g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Participation Mortgage
Loans. The Servicer is in good standing to service mortgage loans for either
Xxxxxx Mae or Xxxxxxx Mac. The Servicer is a member in good standing of the MERS
system;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading; and
(i) No Commissions to Third Parties. The Servicer has not dealt with
any broker or agent or anyone else who might be entitled to a fee or commission
in connection with this transaction other than the Seller.
Section 6.02 Remedies for Breach of Representations and Warranties of the
Servicer.
It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of each Transfer Date hereunder and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of the Seller, the Servicing Rights Owner and the applicable Participants. Upon
discovery by either the Servicer, the Servicing Rights Owner, Master Servicer or
the Seller of a breach of any of the foregoing representations and warranties
which materially and adversely affects the ability of the Servicer to perform
its duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Participation Mortgage Loans, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property or
the interest of the Seller, Servicing Rights Owner or the applicable
Participants, the party discovering such breach shall give prompt written notice
to each other party.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section 6.01
which materially and adversely affects the ability of the Servicer to perform
its duties and obligations under this Agreement or otherwise materially and
adversely affects the value of any Participation Mortgage Loan, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property,
the Servicer shall use its Best Efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Servicer shall, at
the option of the Master Servicer or the Majority Participants with respect to
the related Participation Mortgage Loan, assign the Servicer's rights and
obligations with respect to the related Participation Mortgage Loan under this
Agreement to a successor Servicer. Such assignment shall be made in accordance
with Section 9.01 and 9.02.
In addition, the Servicer shall indemnify the Master Servicer, the
Seller and the applicable Participants and hold each of them harmless against
any Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer representations and
warranties contained in this Agreement. It is understood and agreed that the
remedies set forth in this Section 6.02 constitute the sole remedies of the
Master Servicer, the Seller and the applicable Participants respecting a breach
of the foregoing representations and warranties.
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Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
the Seller, the Master Servicer or applicable Participants to the Servicer, (ii)
failure by the Servicer to cure such breach within the applicable cure period,
and (iii) demand upon the Servicer by the Master Servicer, the Seller or the
applicable Participants for compliance with this Agreement.
Section 6.03 Additional Indemnification by the Servicer; Third Party Claims.
The Servicer shall indemnify the Seller, the Master Servicer, the
Servicing Rights Owner and the applicable Participants and hold them harmless
against any and all Costs that the indemnified party may sustain in any way
related to (i) the failure of the Servicer to perform its duties and service the
Participation Mortgage Loans in material compliance with the terms of this
Agreement or (ii) the failure of the Servicer to cause any event to occur which
requires its "Best Efforts" under this Agreement. The Servicer shall immediately
notify the Seller, the Master Servicer, the Servicing Rights Owner, the
applicable Participants, or any other relevant party if a claim is made by a
third party with respect to this Agreement or the Participation Mortgage Loans,
assume (with the prior written consent of the indemnified party) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or any indemnified party in respect of such claim and follow
any written instructions received from such indemnified party in connection with
such claim. Each indemnified party, as applicable, promptly shall reimburse the
Servicer for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Servicer's indemnification
pursuant to Section 6.02, or the failure of the Servicer to service and
administer the Participation Mortgage Loans in material compliance with the
terms of this Agreement. In the event a dispute arises between an indemnified
party and the Servicer with respect to any of the rights and obligations of the
parties pursuant to this Agreement, and such dispute is adjudicated in a court
of law, by an arbitration panel or any other judicial process, then the losing
party shall indemnify and reimburse the winning party for all attorney's fees
and other costs and expenses related to the adjudication of said dispute.
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ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign entity in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Participation Mortgage Loans and to perform its duties
under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution (i)
having a net worth of not less than $25,000,000, and (ii) which is a Xxxxxx Mae
or Xxxxxxx Mac approved servicer in good standing.
Section 7.02 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Seller, the Master
Servicer or the applicable Participants for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such person against any breach of warranties or representations
made herein, or failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the
Participation Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that the
Servicer may, with the consent of the Master Servicer, undertake any such action
which it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto. In such event, the Servicer shall be
entitled to reimbursement from the Seller and the applicable Participants for
the reasonable legal expenses and costs of such action.
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Section 7.03 Limitation on Resignation and Assignment by the Servicer.
The Seller has entered into this Agreement with the Servicer in
reliance upon the independent status of the Servicer, and the representations as
to the adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Servicer shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof with respect to any Participation Mortgage
Loan, or sell or otherwise dispose of all or substantially all of its property
or assets without, in each case, the prior written consent of the Master
Servicer and the Servicing Rights Owner, which consent, in the case of an
assignment of rights or delegation of duties, shall be granted or withheld in
the discretion of the Master Servicer and the Servicing Rights Owner, and which
consent, in the case of a sale or disposition of all or substantially all of the
property or assets of the Servicer, shall not be unreasonably withheld;
provided, that in each case, there must be delivered to the Master Servicer and
each Participant that is a securitization trustee a letter from each applicable
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the securities evidencing
interests in or obligations secured by such Participation Mortgage Loan.
Notwithstanding the foregoing, the Servicer, without the consent of the Master
Servicer or the Servicing Rights Owner, may retain third party contractors to
perform certain servicing and loan administration functions, including without
limitation, hazard insurance administration, tax payment and administration,
flood certification and administration, collection services and similar
functions; provided, that the retention of such contractors by the Servicer
shall not limit the obligation of the Servicer to service the Participation
Mortgage Loans pursuant to the terms and conditions of this Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it with respect to any Participation Mortgage Loan except by mutual
consent of the Servicer, the Master Servicer and the Servicing Rights Owner or
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Seller and the Master
Servicer which Opinion of Counsel shall be in form and substance acceptable to
the Master Servicer. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder in the manner provided in Section 9.01.
Without in any way limiting the generality of this Section 7.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder with respect to any
Participation Mortgage Loan or any portion thereof or sell or otherwise dispose
of all or substantially all of its property or assets, without the prior written
consent of the Master Servicer and the Servicing Rights Owner, then the Master
Servicer or the Servicing Rights Owner shall have the right to terminate this
Agreement upon notice given as set forth in Section 8.01, without any payment of
any penalty or damages and without any liability whatsoever to the Servicer or
any third party.
Section 7.04 Subservicing Agreements and Successor Subservicer.
(a) The Servicer may enter into subservicing agreements for
any servicing and administration of the Participation Mortgage Loans with any
institution which (i) is an approved Xxxxxx Xxx or Xxxxxxx Mac Seller/Servicer
and (ii) which represents and warrants that it is in compliance with the laws of
each state as necessary to enable it to perform its obligations under such
subservicing agreement. For this purpose, subservicing shall not be deemed to
include the use of a tax service, or services for reconveyance, insurance,
property inspection or brokering REO Property or the retention of third party
contractors to perform certain servicing and loan administration functions,
including without limitation, hazard insurance administration, tax payment and
administration, flood certification and administration, collection services and
similar functions. The Servicer shall give prior written notice to the Master
Servicer, the Seller and the applicable Participants of the appointment of any
subservicer and shall furnish to the Master Servicer a copy of such subservicing
agreement. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on Participation Mortgage Loans immediately upon receipt by
any subservicer of such payments. Any such subservicing agreement shall be
consistent with and not violate the provisions of this Agreement. Each
subservicing agreement shall provide that a successor servicer shall have the
option to terminate such agreement without payment of any fees if the
predecessor servicer is terminated or resigns.
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(b) The Servicer may terminate any subservicing agreement to
which it is a party in accordance with the terms and conditions of such
subservicing agreement and either itself directly service the related
Participation Mortgage Loans or enter into a subservicing agreement with a
successor subservicer that qualifies under Section 7.04(a).
(c) Notwithstanding any subservicing agreement or the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Seller, the Master Servicer and the applicable Participants for the servicing
and administering of the Participation Mortgage Loans in accordance with the
provisions hereof without diminution of such obligation or liability by virtue
of such subservicing agreements or arrangements or by virtue of indemnification
from the subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Participation Mortgage Loans. The Servicer shall be entitled to enter into any
agreement with a subservicer for indemnification of the Servicer by such
subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause.
This Agreement shall be terminable with respect to each Participation
Mortgage Loan at the option of the Seller or the Master Servicer if any of the
following events of default exist on the part of the Servicer:
(i) any failure by the Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Master Servicer; or
(ii) failure by the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer set
forth in this Agreement which continues unremedied for a period of 30 days; or
33
(iii) failure by the Servicer to maintain its license to do business or
service residential mortgage loans in any jurisdiction, if required by such
jurisdiction, where the Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for three Business Days; or
(vii) the Servicer ceases to meet the qualifications of a Xxxxxx Mae or
Xxxxxxx Mac seller/servicer; or
(viii) the Servicer attempts to assign the servicing of the
Participation Mortgage Loans or its right to servicing compensation hereunder or
the Servicer attempts to sell or otherwise dispose of all or substantially all
of its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof (to other than a third party in the case of outsourcing routine tasks
including, but not limited to, taxes, insurance, property inspection,
reconveyance, collection or brokering REO Property), in each case without
complying fully with the provisions of Section 7.03.
In each and every such case, so long as an event of default shall not
have been remedied, in addition to whatever rights the Seller or the
Participants may have at law or equity to damages, including injunctive relief
and specific performance, the Seller or the Master Servicer, by notice in
writing to the Servicer and the Servicing Rights Owner, may terminate all the
rights and obligations of the Servicer under this Agreement with respect to any
Participation Mortgage Loan and in and to the servicing contract established
hereby and the proceeds thereof.
34
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to one or more
of the Participation Mortgage Loans or otherwise, shall pass to and be vested in
a successor Servicer appointed by the Servicing Rights Owner and the Master
Servicer. Upon written request from the Master Servicer or the Servicing Rights
Owner, the Servicer shall prepare, execute and deliver to the successor entity
designated by the Master Servicer or the Servicing Rights Owner any and all
documents and other instruments, place in such successor's possession all
Servicing Files and to do or cause to be done all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, including
but not limited to the transfer and endorsement or assignment of the applicable
Participation Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with the Seller, the Servicing Rights
Owner and the Master Servicer and such successor in effecting the termination of
the Servicer's responsibilities and rights hereunder, including without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the applicable
Participation Mortgage Loans.
By a written notice, the Seller and the Master Servicer may waive any
default by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
Section 8.02 Termination Without Cause.
This Agreement shall terminate with respect to each Participation
Mortgage Loan upon: (i) the later of (a) the distribution of the final payment
or liquidation proceeds on the last Participation Mortgage Loan to the Master
Servicer (or advances by the Servicer for the same), and (b) the disposition of
all REO Property acquired upon foreclosure of the last Participation Mortgage
Loan and the remittance of all funds due hereunder, or (ii) mutual consent of
the Servicer, the Servicing Rights Owner, Seller and the Master Servicer in
writing or (iii) at the sole discretion of the Servicing Rights Owner. Any such
termination pursuant to clause (iii) above shall be with 30 days' prior notice,
in writing and delivered to the Seller, the Master Servicer and the Servicer by
registered mail to the addresses set forth in Section 9.03 of this Agreement).
The Servicer shall comply with the termination procedures set forth in Sections
7.03, 8.01 and 9.01 hereof. The Master Servicer (except as provided in clause
(ii)) or the Participants shall have no right to terminate the Servicer pursuant
to this Section 8.02.
35
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement with respect to one or more of the Participation
Mortgage Loans: (a) pursuant to Sections 6.02, 7.03, 8.01 or 8.02(ii), the
Servicing Rights Owner shall appoint a successor satisfying the requirements of
clauses (i) and (ii) of Section 7.01, which successor shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement with respect to the related Participation Mortgage
Loans simultaneously with the termination of the Servicer's responsibilities,
duties and liabilities under this Agreement. If the Servicing Rights Owner fails
to promptly appoint a successor, the Master Servicer shall (i) succeed to and
assume all of the Servicer's responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor having the characteristics set
forth in clauses (i) and (ii) of Section 7.01 and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement simultaneously with the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement. Any
successor to the Servicer shall be subject to the approval of the Master
Servicer and shall be a member in good standing of the MERS system (if any of
the related Participation Mortgage Loans are MERS Eligible Mortgage Loans,
unless such Participation Mortgage Loans are withdrawn from MERS and Assignments
of Mortgage are recorded in favor of the Seller at the expense of the successor
Servicer) and shall be an FHA Approved Mortgagee and a VA Approved Lender. Any
approval of a successor servicer shall be conditioned upon the receipt by the
Master Servicer and each Participant that is a securitization trustee a letter
from each applicable Rating Agency to the effect that such transfer of servicing
will not result in a qualification, withdrawal or downgrade of the then-current
rating of any of the securities evidencing interests in or obligations secured
by such Participation Mortgage Loan. In connection with such appointment and
assumption, the Seller or Master Servicer, as applicable, may make such
arrangements for the compensation of such successor out of payments on related
Participation Mortgage Loans as it and such successor shall agree, provided,
however, that no such compensation shall be in excess of that permitted the
Servicer under this Agreement. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 9.01 and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Sections 6.01 and the remedies available to the Master Servicer
and the Seller under Section 6.02 and 6.03, it being understood and agreed that
the provisions of such Sections 6.01, 6.02 and 6.03 shall be applicable to the
Servicer notwithstanding any such resignation or termination of the Servicer, or
the termination of this Agreement.
Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement of the related Mortgage Notes and related documents, and the
preparation and recordation of Assignments of Mortgage. The Servicer shall
cooperate with the Master Servicer, the Servicing Rights Owner or the Seller, as
applicable, and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Servicer, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or the
Escrow Account or thereafter received with respect to the related Participation
Mortgage Loans.
36
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Master Servicer, the Servicing Rights Owner and the Seller an
instrument (i) accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 6.01 (including a
representation that the successor Servicer is a member of MERS, unless none of
the related Participation Mortgage Loans are MERS Mortgage Loans or MERS
Eligible Mortgage Loans or any such Participation Mortgage Loans have been
withdrawn from MERS and Assignments of Mortgage are recorded in favor of the
Seller) and (ii) an assumption of the due and punctual performance and
observance of each covenant and condition to be performed and observed by the
Servicer under this Agreement, whereupon such successor shall become fully
vested with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement. If any successor is appointed to service less than all of the
Participation Mortgage Loans under this Agreement, the parties hereto will enter
into an agreement substantially similar to this Agreement with the successor to
reflect the servicing of such Participation Mortgage Loans by such successor.
Any termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that
the Seller, the Master Servicer or the Servicing Rights Owner may have against
the Servicer arising out of the Servicer's actions or failure to act prior to
any such termination or resignation.
The Servicer shall deliver promptly to the successor servicer the funds
in the Custodial Account and Escrow Account and all Participation Mortgage Loan
documents and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify the Master Servicer and the Seller of such appointment in
accordance with the procedures set forth in Section 9.03.
Section 9.02 Costs.
The Seller shall pay any legal fees and expenses of its attorneys.
Costs and expenses incurred in connection with the transfer of the servicing
responsibilities, including fees for delivering Servicing Files, shall be paid
by the Seller. Subject to Sections 2.02 and 3.01(a), the Seller shall pay the
costs associated with the preparation, delivery and recording of Assignments of
Mortgages.
Section 9.03 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if sent by facsimile or mailed by
overnight courier, addressed as follows (or such other address as may hereafter
be furnished to the other party by like notice):
37
(i) if to the Seller:
Structured Asset Securities Corporation
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000-000-0000
(ii) if to the Servicing Rights Owner:
Xxxxxx Brothers Bank, FSB
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Contract Finance - Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile: (000) 000-0000
(iii) if to the Servicer:
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Loan Administration
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
38
(iv) if to the Master Servicer:
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: E. Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(v) if to a Participant:
As provided in the related Participation Agreement.
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.
Section 9.04 Severability Clause.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Participation Mortgage Loan shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law which
prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this Agreement
shall deprive any party of the economic benefit intended to be conferred by this
Agreement, the parties shall negotiate, in good-faith, to develop a structure
the economic effect of which is as close as possible to the economic effect of
this Agreement without regard to such invalidity.
Section 9.05 No Personal Solicitation.
From and after each Transfer Date, the Servicer hereby agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Servicer's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Participation Mortgage Loan (on a targeted basis) for any purposes of
prepayment, refinancing or modification of the related Participation Mortgage
Loan, provided, however, that this limitation shall not prohibit Servicer from
soliciting such Mortgagor for purposes of prepayment, refinance or modification
of any loan owned or serviced by Servicer other than a Participation Mortgage
Loan. It is understood and agreed that, among other marketing activities,
promotions undertaken by Servicer which are directed of the general public at
large or which are directed generally to a segment of the then existing
customers of Servicer or any of its direct or indirect subsidiaries (including,
without limitation, the mailing of promotional materials to Servicer's deposit
customers by inserting such materials into customer account statements, mass
mailings based on commercially acquired mailing lists and newspaper, radio and
television advertisements) shall not constitute solicitation under this section.
In the event the Servicer does refinance any Participation Mortgage Loan as a
result of a violation of the requirements set forth in this Section 9.05,
Servicer hereby agrees to pay to the applicable Participants an amount equal to
the difference, if any, between the amount that the applicable Participants
would have received if it had sold the Participation Mortgage Loan to a third
party, and the proceeds received by the applicable Participants as a result of
such refinancing.
39
Section 9.06 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.07 Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Seller in the State of New York and shall
be deemed to have been made in the State of New York. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING
NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
Section 9.08 Further Agreements.
The Seller and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 9.09 Intention of the Parties.
It is the intention of the parties that the Seller is conveying, and
the Servicer is receiving only a contract for servicing the Participation
Mortgage Loans. Accordingly, the parties hereby acknowledge that the Seller and
the related Participants remain the sole and absolute owners of the
Participation Mortgage Loans and all rights (other than the servicing rights)
related thereto.
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer, the Servicing Rights Owner, the Seller and the
Master Servicer and their respective successors and assigns. This Agreement
shall not be assigned, pledged or hypothecated by the Servicer to a third party
except in accordance with Section 7.03.
40
Section 9.11 Waivers.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.12 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.13 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 9.14 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
41
IN WITNESS WHEREOF, the Servicer, the Seller, the Servicing Rights
Owner and the Master Servicer have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the date first above
written.
STRUCTURED ASSET SECURITIES CORPORATION,
as Seller
By:
----------------------------------------
Name:
Title: Authorized Signatory
XXXXXX BROTHERS BANK, FSB,
as Servicing Rights Owner
By:
----------------------------------------
Name:
Title: Authorized Signatory
AURORA LOAN SERVICES INC.,
as Servicer
By:
----------------------------------------
Name:
Title:
AURORA LOAN SERVICES INC.,
as Master Servicer
By:
----------------------------------------
Name:
Title:
EXHIBIT A
PARTICIPATION MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 20__
To:
------------------------
---------------------------
---------------------------
(the "Depository")
As Servicer under the Participation Servicing Agreement, dated as of
January 1, 2002 (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 3.03 of the
Agreement, to be designated as "Aurora Loan Services Inc., in trust for
Structured Asset Securities Corporation and the various Participants." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. This letter is submitted to you in duplicate. Please execute
and return one original to us.
AURORA LOAN SERVICES INC.
By:
----------------------------------------
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
---------------------------------------------
Depository
By:
----------------------------------------
Name:
Title:
Date:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 20__
To:
------------------------
---------------------------
---------------------------
(the "Depository")
As Servicer under the Participation Servicing Agreement, dated as of
January 1, 2002 (the "Agreement"), we hereby authorize and request you to
establish an account, as an Escrow Account pursuant to Section 3.05 of the
Agreement, to be designated as "Aurora Loan Services Inc., in trust for
Structured Asset Securities Corporation and the various Participants." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. This letter is submitted to you in duplicate. Please execute
and return one original to us.
AURORA LOAN SERVICES INC.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
---------------------------------------------
Depository
By:
----------------------------------------
Name:
Title:
Date
